Examples of split ownership

Fens Co-op owns two turbines at the wind farm at Deeping St Nicholas, and EDF owns the other eight. Grid access and certain cabling is shared which has led to the debt financing being shared. The structure qualified for EIS relief.

Baywind started with a similar structure owning one of four turbines. But it shared the overall income and costs with the commercial co-owner, and this was not eligible for EIS. Baywind has since bought the entire wind farm.

More details on split ownership

Split Ownership

The approach referred to as 'split ownership' refers to projects which are divided into two (or more) independent portions.

One of the eventual owners would be a community enterprise. The other owner or owners would typically be the commercial project developer; or a utility, independent power producer, or investment fund to which the developer sells the energy generating station.

This is the approach which is eligible for registration of overall projects up to 10MW under Feed-in Tariffs, as described here.

Ownership and maintenance of the assets

The community enterprise, for example a Community Benefit or Co-operative Society, raises the funds to buy or build their part. In this case, the community enterprise takes possession of its part of the generating plant so owns a physical asset.

The community enterprise would also be responsible for all aspects of the operation, monitoring and maintenance of their equipment.

A more detailed description (first prepared for the Taskforce) of the split ownership approach, and its associated issues, is available here.

Some benefits and considerations

From the developer's perspective, the result is very similar to a stand-alone commercial project in that they end up with full ownership of a discrete asset, which can then be dealt with at their discretion, and for example sold on individually or as part of a portfolio.

The community would similarly end up with its own asset just like a separate community-owned renewable power station. It therefore has the freedom to raise its equity and/or debt as it chooses.

There will probably need to be some duplication of equipment to allow each plant to connect to the grid and meter its output. If any equipment or buildings are shared, the inter-relationships will need to be defined and the impacts of any problems assessed. The same applies to any shared access or instances where one scheme may need access across the site of the other.

The two projects can benefit from economies of scale by contracting together for construction and/or operation and maintenance contracts. Remember these may be lost of one later decides to change contractors (as it is entitled to do).